Financial Daily from THE HINDU group of publications
Saturday, May 11, 2002
Industry & Economy - Economy
Industrial growth falls to nine-year-low of 2.7 pc
NEW DELHI, May 10
THE country's industrial growth has plummeted to a nine-year-low of 2.7 per cent during 2001-02.
According to the 'quick estimates' of the Index of Industrial Production (IIP), released by the Central Statistical Organisation (CSO) here on Friday, the average growth rate of 2.7 per cent for the 'general' index during the fiscal just ended was below the corresponding levels of five per cent and 6.7 per cent for 2000-01 and 1999-2000 respectively.
The growth rates for 'manufacturing', 'mining and quarrying' and 'electricity' during 2001-02 stood at 2.7 per cent, 1.8 per cent and 3.1 per cent respectively, which again ruled below their corresponding 2000-01 and 1999-2000 levels of 5.3 per cent, 3.7 per cent and 4 per cent and 7.1 per cent, one per cent and 7.3 per cent respectively.
If one were to take into account the growth rates for the early 1990s derived from the earlier IIP series (using 1981-82 as the base year, as against 1993-94 now), it turns out that the 2.7 per cent average growth for 2001-02 is the lowest since the 0.6 per cent and 2.3 per cent levels recorded during 1991-92 and 1992-93, respectively.
In other words, the growth momentum unleashed by the early reform initiatives, which scaled a peak during 1994-95 and 1995-96, has clearly lost pace and the economy is today in the danger of drifting downhill.
The use-based classification of the IIP reveals that the overall dismal industrial performance during 2001-02 was mainly led by capital goods, which recorded a decline of four per cent, compared to a growth of 1.8 per cent in 2000-01.
Similarly, the growth rates fell from 3.9 per cent to 2.8 per cent for basic goods, from 4.7 per cent to 1.5 for industrial goods and from 5.8 per cent to 3.8 per cent for consumer non-durables.
It is only consumer durables that have been relatively insulated from the recessionary currents, with the segment growing by 11.6 per cent in 2001-02 over and above the growth rate of 14.5 per cent for 2000-01.
For the latest recorded month of March 2002, the overall annual point-to-point industrial growth has been estimated at 2.4 per cent (against 2.3 per cent in March 2001), two per cent (2.6 per cent) for manufacturing, three per cent (1.3 per cent) for mining and 5.2 per cent (1.7 per cent) for electricity.
As per the use-based classification, the growth rates for March 2002 worked out to minus one per cent for capital goods (minus 1.1 per cent in March 2001), 3.7 per cent (minus 0.3 per cent) for basic goods, minus 1.9 per cent (6.7 per cent) for intermediate goods, 4.9 per cent (3.6 per cent) for consumer non-durables and 9.7 per cent (minus 0.2 per cent) for consumer durables.
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